Why Startups are Like Baby Sea Turtles
The morning sun warms the beach on a beautiful Friday morning. The night before, female sea turtles had ascended onto the beach to lay their eggs. Hatchling Sea turtles the size of Ping-Pong balls climb onto the beach from their nests together. The theory is that one baby sea turtle can’t break the nest by itself, so they do it all together instinctually to survive.
Many tourists gather in awe to watch this miracle of nature as the creatures make their way to the sea. Nests of sea turtles can contain on average 100 hatchlings yet/but statistically only 1% will reach full maturity.
Society views startups in a similar way: loving to watch lots of cute baby startups make their way from the nest. Unfortunately, directly or indirectly, society chooses to ignore the fact that the failure rate of startups is estimated to be as high as 90%. Instead of working to improve this statistic, society eagerly awaits the next hatching of ideas and businesses, thus loving the birth process of startups but not valuing their survival nearly as much until they metamorphose into profitable unicorns.
Startups face many odds in their infancy, and failure rates are high because many questions remain unanswered, problems go unresolved, and more often than not a startup has a finite window to solve them. Much like baby sea turtles, they are vulnerable in the beginning, and the key is surviving to maturity.
Paul Graham from Y Combinator put it perfectly: “If you can just avoid dying, you get rich.” Obviously, this doesn’t mean just sitting around waiting to get rich, but not actually impeding your own chances of survival. Most startups fail because of self-inflicted wounds without even being aware of it.
According to CB Insights, the top three reasons for startup failure were: no market need, ran out of cash and not the right team. Arguably, these failure rates have to do with execution and strategy rather than external forces beyond the founders’ control.
Startups can achieve at least an initial level of success because of the “cool” factor automatically attributed to startup entrepreneurs. However, the hype is so inflated that society translates the birth of a startup as being comparable in potential to Facebook. With a flood of amateur entrepreneurs backed by amateur investors trying to catch this wave, a massive bubble gets created in the market.
Millennials (myself included) in particular are at great risk seeing success story after success story with little appreciation or understanding of how many startups fail. This naïve perspective only increases the failure rate because people are doing it for the wrong reasons. To succeed, you need to avoid illusions of grandeur at all costs to protect your business and maintain a realistic outlook to drive your future. I remember making the decision almost a decade ago that I wanted to work in a startup culture and people reacted like I was opting for a crazy alternative lifestyle. This type of sentiment will return after the next startup bubble reestablishes itself after the “wantapreneurs” look for greener pastures.
Gimlet Media’s podcast “Startup” explores quite well the reality most startups face. Startups are hard emotionally, physically and intellectually, but for those that get the bug, it’s a welcome challenge.
Here are some things to consider before embarking on a startup:
1) Figure out how to solve someone else’s problem, not your own. If you don’t solve a market need or business problem, you’ll fare far worse than a baby sea turtle. Apply your skill set in the right avenue. If you love creating technology but not solving problems, go into academic research and get a grant. I can’t tell you how many times I hear people say, “I was doing blank. So I thought if I did blank in this way to solve it, there’s my business opportunity.” Starting businesses in a silo is the most dangerous path. If you are one of the very few with no problems, give Jay-Z a call. I heard he’s got 99 problems; he could probably lend you one.
2) Talk to customers to see if your solution can actually solve their problems. Startups go into business blindly assuming everyone shares their problem and that they can solve it. Before you start a startup, talk to your potential customers first. You will learn two things; first, how well you can articulate your business concept and if there is market resonance, second, if you can sell the solution. Talking to potential customers about your business concept is a great idea, and ideally they’ll become your customers tomorrow. Sooner or later, you have to talk to them anyway, so get cracking now. I am a big fan of a lean startup. There is a term called Genchi Gembutsu, which means “go and see for yourself.”
3) Marketing is critical, but without network effects and analytics, you are swimming upstream. If your customers or users are not spreading the word about your app/business/idea, something’s wrong. Many startups start with the fallacy that they can take over the world from day one. Yes, many times it’s a numbers game, but you need to have a singularity of users to track progress to see what works and what doesn’t. Analytics are your life line, almost as important as capital itself. Start small with groups that are passionate about your business. Conversion rates, bounce rates, and churn are all analytics you should be familiar with to drive a healthy, profitable product. A term you may not have heard of is called growth hacking, and it’s something you as a startup founder should know inside and out. Weinberg and Mares’ business book “Traction” covers this concept at length.
4) Be passionate about your business. This is the most important factor. Much like baby sea turtles, once you get in that water, you are completely on your own and there are 100 things that want to eat you every step of the way. I love the idea that the future is completely in my hands. For better or worse, my level of output directly correlates to success or failure, but some do not like this pressure. However, being part of a startup can be a very isolating time. Founder’s depression and the trough of sorrow are very real experiences. Burnout and stress can cripple a business and its founders. Find an escape that helps you cope, such as networking with other startup founders. Your passion for your business will thrive and your mind and body will thank you.
This article is not meant to discourage people from founding startups; simply to warn against the early pitfalls. It’s meant to inspire you to realistically harness your destiny. The reality is that only you can craft your success story. Look to other founders of startups to develop an ecosystem of support; they don’t necessarily have to be in your industry. Just make sure that family isn’t your primary support system when the hard conversations need to happen; you’re better off relying on an impartial party.
Society will root for you in the beginning and when you become successful, but in the meantime, find a tight-knit community. Working with like-minded passionate people can prevent burnout and save your business. Don’t work in isolation; otherwise, you are a baby sea turtle in a deep blue ocean.